More cash and Key hints at extra leave

Paid parental leave is set to increase and more parents may become eligible as rival parties push their "family friendly" message in election year.

Prime Minister John Key yesterday ruled out extending the payment, worth up to $488 a week, from 14 to 26 weeks as proposed by Labour MP Sue Moroney.

She has the backing of most MPs for her bill, which would take effect from July 1.

Key and Finance Minister Bill English said they would exercise the Government's right to a "financial veto" to defeat the bill if it went ahead as drafted.

But Key indicated that while 26 weeks was unaffordable National may back a smaller increase.

"It's a large financial cost and it's got to be seen against a whole range of other priorities," he said.

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"I'm not saying it's not important and I'm not saying there couldn't be some modest expansion.

"But do we want that at the expense of more money going into cancer drugs, potentially more police officers, more money spent on improving our education system?"

English said extra spending on paid parental leave (PPL) would be balanced against "other quite urgent needs for the most vulnerable children".

He said his focus was "on the real hard-end need for the most vulnerable".

It is understood the Government may open PPL to more parents, with only 40 per cent of 60,000 now qualifying.

Those who miss out include casual and seasonal workers, parents who have already left work to look after an older child, beneficiaries and those without six months of continuous work.

Moroney said she understood National had not changed its stance since last year; that it would bring its proposals to the select committee considering her bill. She was open to fewer than 26 weeks PPL and to broadening eligibility.

The latter was not included in her member's bill because it was "already adventurous" for an Opposition MP.

Possible changes could include a possible period of leave exclusively for fathers, who were likely to miss out even if the period was extended to 26 weeks. That matched the World Health Organisation recommendation for exclusive breast feeding of babies.

Meanwhile, the Government has continued to attack Labour leader David Cunliffe's plan for a $60-a-week payment for new parents, saying it is unaffordable without tax increases.

But Cunliffe said the policy was fully costed and Labour would run Budget surpluses.

It would release its full tax policy later in the year.

He said for every dollar spent ensuring children got the best start there was an $11 payback.

Under his plan a family earning up to $150,000 a year would receive $60 a week for each baby until the child's first birthday.

A family's expected income would be used to determine who qualified, not their earnings in the year before the baby was born.

For those with incomes up to $50,000 a year the $60 a week would continue until the baby turned 3.

Those earning between $50,000 and $77,000 would receive reduced amounts between the child's first and third birthdays. So a family earning $55,000 would get about $50 a week till their child turned 3 and those earning $63,000 would get $40 a week.

But Cunliffe confirmed those receiving paid parental leave would not get the baby bonus at the same time - something not highlighted in his state of the nation speech.